Carbon Transformation Tech: Clothes Made of CO2? | WSJ Tech News Briefing

[Music] I'm Zoe Thomas for The Wall Street Journal this is a special episode of tech news briefing part of our four-part series on climate Tech today we're talking about the power of transformation carbon transformation that is you may have heard of carbon sequestration where carbon is captured from the air or in factories turned into a solid or a liquid and then stuck deep underground but what if instead of burying all that carbon it was turned into something useful Green Tech investing has rebounded from a bust about a decade ago particularly over the last two years carbon and Emissions tech companies raised more than ten and a half billion dollars from Venture investors in the first three quarters of 2022 according to pitchbook of that more than three and a half billion went specifically towards carbon management companies focused on capturing sequestering and transforming carbon our climate Finance reporter amrith Ram Kumar says many investors see carbon transformation as something of a Holy Grail it's this sort of Trash to Treasure process that eliminates emissions and then it turns into a useful product so people find that idea easy to understand and they're super excited about it because of the environmental impact the challenge is of course how to do this profitably and in a cost-competitive way and that's the piece that no one's really figured out yet so investors are very excited about it they're hopeful they're putting money into companies they think can get there with government subsidies and other help but it's still a long path to actually do it we'll hear more from amworth later in the show but first one of those carbon Transformations startups is Silicon Valley based Ruby it hopes to change the fashion industry with textiles made from captured CO2 last year it raised four and a half million dollars from investors it also got a quarter million dollar Grant from the National Science Foundation f is Ruby's co-founder and CEO hi Nika thanks for being here thanks for having me I want to jump right into what ruby does the goal is to take carbon out of the air and turn it into fabric how do you do that I really think the best way to think about this is we mimic what trees do when you think of a tree it breeds in CO2 so carbon starting as air right it breathes that in and turns it into its solid trunk branches and leaves how it does that is using enzymes enzymes are these molecules that help reactions happen and so that's what our system is basically mimicking and we're inspired by these powerful systems in nature we're able to take CO2 from a gas form we collect that from manufacturing facilities so facilities that would have normally emitted that CO2 in the atmosphere what is your fabric when it comes out is this something different from Fabrics that we're familiar with now so our material is actually the same material material that is already used in textiles it's the third most common family of textiles it's called man-made cellulosic fibers as the industry lingo but what that really looks like if you check the tag on your clothes is you might see it as viscose lyocell rayon Jersey even some Satins so it's a pretty common material and that's just our first material Focus so what we're also developing with some of these apparel Brands is sort of our next step of product development in the apparel space which is mimicking cotton-like materials and also polyester materials what stage of development is Ruby at when it comes to manufacturing we're at the lab stage right now and what that looks like is doing materials testing with cellulose and product that we produce in our lab we're partnering with apparel Brands and manufacturers right now at the pilot stage to basically do this materials testing progress into garment prototypes and then soon also do some capsule collection launches which is basically thousands of units per brand how do you scale up and what are the steps that you need to take and how quickly can you make those right the big steps for us are really scaling our production process so right now we have basically a 1 leader system in the lab and that's what's doing the CO2 to cellulose polymer conversion with our enzymes that's enough for you know this early materials testing and prototyping but our next step is basically scaling up that system and we generally do about 10x increase volumes each time we scale up and that's what unlocks the capsule Collections and then real commercialization the timelines there are actually relatively very fast and what we look at is trying to be faster than what brands are used to with materials innovators by using technologies that have really great maturity across other Industries so we're using Technologies from the food and beverage industry that have already been scaled but we're able to apply it to basically a new application which allows us to know that as we scale we can do things faster than a completely new untested technology that might take you know years and years and years to commercialize from the food and food and processes for decades and when you look at things like high fructose corn syrup production or lactose free milk it actually uses Cascades of enzymes and so that's something that we've been able to leverage really heavily as we scale up our system design which is certainly more complex but is able to use some similar principles so the tools you need to scale up with your technology are there how fast are we talking though we're not saying exactly all of our launch timelines but what we're really excited about is we're expecting to be able to with some of our brand partners and Manufacturing Partners launch capsule Collections and that's you know thousands of units per brand and then into 2024 that's the year that we expect to achieve really significant commercialization scale so let's talk about cost a bit how will your product then compare to what's already on the market yeah so at the lab stage that we're at today making you know small batches it's definitely a higher price point but that's just for our limited time sort of lab testing what we're intending is by the time we get to Market which is aiming for end of 2023 early 2024 where consumers can actually buy this in stores that our material would be the same price as the textiles that are used in those garments and so what that will look like for consumers is everything will you know be the same price points that you're used to and that's sort of just the beginning we actually as we continue to grow expect our costs to dramatically drop and become cheaper than standard textile price points over 2024 and Beyond and that's something that also for us helps unlock those other verticals Beyond just textiles so going into building materials food packaging and more Nika mashup CEO of Ruby thank you so much for joining us thank you Ruby is by no means the only company making a push into the carbon transformation market and like Ruby many of these companies are still in the early phases of development there are plenty of questions about whether they can make the numbers add up and turn a profit or even live up to their Promises of making an overall environmental impact joining me to discuss that is Wall Street Journal climate investment reporter amrith ramkumar hi amruth thanks for joining me thanks so much for having me who are the investors who are focused on this industry the investors really run the gamut you have Wall Street firms that are trying and Venture capitalists who are trying to get in early with some of the big companies of the future and this area is one where people see big breakthroughs coming hopefully and then you also have a lot of heavy industry companies so oil and gas companies they're all looking at the space and making pretty small Investments for them and then you also have chemicals companies that have large environmental Footprints and the key there is a lot of these companies are trying to lower the emissions from their existing operations and make money by investing in big companies of the future and they could also be like potentially lucrative acquisition targets down the road we heard about Ruby but amruth you've spoken with other carbon transformation companies and can you tell us about some of them sure one big one is Lands attack because they've attracted a lot of money and they're really focused on basically using like microbes and biology to turn and carbon emissions and other emissions at factory level into useful chemicals that can basically go right back into the supply chain so it's kind of this circular process and then other companies like Ruby and a host of other really early stage ones are basically kind of at lab or really small scale they're trying to basically create new stuff and use these biological processes and some more things that like replicate fibers or other materials and basically make it from scratch the challenge there is it's often a whole new supply chain a whole new stuff that you need to create and doing it at a large scale and making it lower cost is a huge challenge for them can you tell us a little bit more about what those challenges are I mean both for turning this into something and for turning that something into a business yeah the main ones are cost and also still environmental impact because a lot of these processes need a lot of energy so people are trying to do it with low-cost Renewables but but that's pretty challenging when you're talking about the large amounts of energy a lot of these processes need when you're talking about like lab grown chemicals or things like that and they can also consume large amounts of water and other resources so that's still a barrier and then just cost is the huge one cost and scale just how to do this on a large scale that can be cost competitive with our existing Supply chains that have been perfected over decades and huge companies have earned how to produce large amounts of materials and chemicals that come from oil and gas and other Commodities how are climate activists viewing this kind of Technology a lot of people are very wary just because as I mentioned there are a lot of outstanding questions about how green it actually is once you take into account the whole like life cycle of the process from beginning to end talking about potentially having to ship things around the world and once you do that with anything in the materials or commodity space the environmental footprint starts getting pretty rough so even though a lot of the companies and people in the space are doing it with the best of intentions and doing the best they can to make the screener product it's a huge Challenge and I guess that would matter to on their technical processes for capturing the carbon and going through the process of making whatever product they are because I assume each company would have a different footprint exactly when you're that's one of the attractive things when people talk about capturing it on site and like reusing it or turning it into something else is those carbon emissions already exists and you're kind of capturing them and turning them in like the idea of creating new stuff is where you kind of lose a lot of environmental analysts and people because then you're talking about introducing new sets of resource usage water usage energy usage and that can be really tough the scale of an Exon of a Chevron of the existing oil and gas at chemicals companies and these Supply chains and the lab scale or the pilot scale or the early stage scale these startups are talking about is just not even a drop in the bucket I mean those are some of the challenges that are specific to carbon transformation but there are also these economic challenges that lots of tech companies are facing at the moment and you mentioned all of the investor interest I wonder if we expect to see a pullback given the economic environment that we're in at the moment this is where there's like a silver lining for carbon transformation and climate Tech broadly is that uh it's so early stage and risky that it's kind of seen as a bit insulated from this economic environment just because no one really expects any of these companies to be profitable in the next few years anyway so some of the ones that have gone public or trying to go public are facing some short-term challenges but a lot of money is still flowing into Clean Energy Solutions and the investor is putting money into this don't really expect it to yield something at scale tomorrow so it's more of a longer term bet so again it's seen like the demand is there and not going away if anything the demand will only increase as more companies are under pressure to decar urbanize there was a boom in climate Tech about a decade ago that was followed by a bust I mean how does the situation now compare to back then clean energy investors and Executives say it's night and day compared to about 10 years ago when you had a climate industry bust following a big boom around the financial crisis the big difference today is just that you have these scaled Technologies like Renewables and electric vehicles and batteries that are growing so quickly and people have seen that it is happening and it is working and it's just a matter of time for those and that's giving a lot of people confidence that even though there might be some economic challenges company challenges investor challenges along the way that this trend is here to stay and that so 2022 hasn't been as strong as 2021 which was a record year across the board but it still held up better than a lot of people expected and the government is putting billions of dollars in as well all right that's our reporter amrith Ram Kumar thanks for joining us amrith thanks so much for having me all right that's it for this episode of tech news briefing be sure to check out the other episodes in our special series on new climate Tech we had editorial support on this series from Ed Ballard Ken Brown Dieter Holger Falana Patterson Christina Peterson and amrith RAM Kumar our producer is Julie Chang our executive producer is Chris sinsley for more Tech news head over to our website wsj.com I'm your host Zoe Thomas for The Wall Street Journal thanks for listening foreign [Music] [Music]

Channel: WSJ News

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Keywords: carbon transformation, carbon sequestration, green tech, green technology, carbon management, carbon dioxide clothes, co2, co2 clothing, carbon transformation start up, Neeka Mashouf, wsj, green clothes, rubi, textiles, man made fiber, carbon capture, carbon capture and sequestration, carbon technology, tech news, tech news briefing, sustainability, sustainable fashion, sustainable clothing, fashion industry, future of fashion, lanzatech, carbon into supply chain, techy

Id: gSx2DlYoNyo

Length: 15min 2sec (902 seconds)

Published: Tue Feb 07 2023